Interview with Prof. Thomsen about Realism, 3D-printing and the Real Estate Sector.

End of the Logistics Boom?

Is 3D-printing the end of the logistics real estate boom, Prof. Thomsen?

Over the past few years, logistics real estate has experienced a massive boom. E-commerce and the ever increasing amount of new online-shops are the boost for an increased demand for warehouses and junctions. The development of logistics real estate is exceptional. At 1.83 billion EUR, the transaction volume increased significantly in the first half of 2014. Logistics real estate is coming out of its niche. But this skyrocketing increase is in danger. Currently, a new technology is developing. It is a production tool which will be able to be used in everyday life and which will redefine consumer habits completely in the current era of individualization and plurality of lifestyles: 3D-printing.

We asked Prof. Ben Thomsen, CEO of THOMSEN GROUP, which specializes in innovation, also through research in futurology, what this development has to do with the real estate sector:

Prof. Thomsen, the subject of 3D-printing is considered as an utopia. How realistic is it, that in the future everyone will have a 3D-printer. And when will this state turn reality? And much more important: what will we be able to print with a 3D-printer?

(Prof. Thomsen:) Just a few weeks ago, the first automobile and the first human heart were produced via 3D-printing technology. This is truly where it’s at! It is only “distant drums” to a certain extent. 3D printers will be an ordinary item in domestic households in the same way as a fax machine used to be in the past. Prices, which range between 1,000 to 2,000 Euro now, will drop but this also proves how close this next industrial revolution is. Of course, you will not be able to print out fashionable shoes yet, but probably toy blocks, keys or the battery cover of the TV-remote control that just broke. However, in the more distant future it will be possible though, to print those fashionable shoes I just mentioned above.

Why should the real estate sector be affected by this issue? And what risks does the development you just described entail for logistics real estate?

(Prof. Thomsen:) At first glance, everything will stay the same. Because 3D-printing is part of the future asset of “sharing”. The production designs will be shared by people over the Internet. In case of doubt, the desired product will be ordered directly online anyway. And for the logistics sectors, this will hardly be any different from the booming supply chains. But when in today’s shopping malls around the corner the sales areas are not only shrinking and the food areas are getting bigger, but also the efficient 3D printer can produce the favorite shoes already mentioned in a much more individual way than ever before, shopping mall managers should start to feel uneasy. Of course, consumers will always want to “touch and feel” objects and want to meet other people (that is the reason for the aforementioned growth in catering). But area requirements change drastically, as in: they shrink.And: the shoe customer (or the customer who today shops around for his desired product) will take the product from the 3D-printer straight away. Let’s say: deliver it to himself. The question might arise, if delivery agents will be still necessary? A question which the logistics fans among the asset managers need to look at more closely.

How will the real estate sector have to adapt. Will it have to work on more future-oriented concepts in general?

(Prof. Thomsen:) The real estate sector is unique regarding this aspect. I can tell, because each industry in the portfolio of THOMSEN GROUP makes up around 12% of the total client work we do. Whereas the real estate sector is much stronger accounting for 24%. Real estate companies are in general strongly financially oriented. But most of them don’t recognize what happens at Wall Street: 3D-printing gains significant importance! But regardless of this topic, other industries are more open to knowing what will turn reality in 50 years. You think that this is irrelevant to today’s businesses? It is relevant! We verify every day which development tomorrow and beyond will become today’s market leading innovation. Not infrequently for products whose durability is only 1% of that of real estate. Managers of real estate objects which could endure decades (or even centuries) should at least know what developments will be relevant in 2050. Interestingly, many CEOs, who took the market-securing decision today to mandate a future strategy, will be 100 years old then. In any case, they have received the 100% approval of their Supervisory Board, due to immediate success.